"There has been an improvement in indicators of household and business sentiment recently, but it is still unclear how persistent this will be," he said.

"Public spending is forecast to be quite weak."

Concerns about ongoing uncertainty in the global economy has led the central bank to cut the cash rate by 225 basis points since November 2011.

The most recent cut came in August, when the RBA lowered the rate by 25 basis points.

The central bank says the impact of those rate cuts are being observed in rising asset prices.

"The full effects of these decisions are still coming through, and will be for a while yet," the statement said.

"The pace of borrowing has remained relatively subdued overall to date, though recently there have been signs of increased demand for finance by households."

Improving Australian economic data has prompted some economists to predict the RBA will raise the cash rate late next year.

RBC economist Su-Lin Ong says the RBA's position remains largely unchanged from the last month.

"It's virtually an identical statement to November, so the key themes remain this idea that the economy is running sub-trend that the unemployment rate is edging higher," she said.

"but lending rates and the cash rate are very low that they should continue to work their way through the economy."

Dollar still 'uncomfortably high'

Reserve Bank officials continue show concern about the economic impact of the persistently high value of the Australian dollar.

Mr Stevens says the value of the dollar remains "uncomfortably high".

"A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy," his statement said.

Rate cuts since November 2011

Nov '11: 25 basis points to 4.5 per cent.

Dec '11: 25 basis points to 4.25 per cent.

May '12: 50 basis points to 3.75 per cent.

Jun '12: 25 basis points to 3.5 per cent.

Oct '12: 25 basis points to 3.25 per cent.

Dec '12: 25 basis points to 3 per cent.

May '13: 25 basis points to 2.75 per cent.

Aug '13: 25 basis points to 2.5 per cent.

The Australian dollar dipped in value shortly after the interest rate decision was released.

At 2:45pm (AEDT), it was buying 90.83 US cents.

During a speech at the end of last month, Mr Stevens said intervention in currency markets could be an "effective and useful" instrument to bring down the dollar's value.

However, Mr Stevens did not hint at any plans to use such measures in the near future.

"That doesn't mean we will always eschew intervention," he said.

In recent months, Mr Stevens has also highlighted the importance of the non-mining sectors, particularly housing, in ensuring economic growth.

Figures released by the Australian Bureau of Statistics yesterday showed the number of new homes approved for construction fell by 1.8 per cent in October, but remain 23.1 per cent higher than during the same month last year.

Retail sales figures released today show a 0.5 per cent increase in consumer spending during October.

The result was above economists forecasts, and means retail sales have been increasing consistently for the past six months.